According to Czech laws, forex broker services are generally classified as investment services. Companies carrying out Forex activities must have a special license from the Czech National Bank, regulated by the MIFID – the EU Directive on Financial Instruments in the EU Markets.
REQUIREMENTS FOR AUTHORIZED CAPITAL FOR A FOREX BROKER LICENSE IN THE CZECH REPUBLIC:
1) EUR 125,000 if the company provides the following services (STP license):
- portfolio management;
- organization of securities offers or securities issue;
- custody and management of securities for the client, as well as related activities, including the transfer of securities, pledge of securities, and other actions related to the encumbrance of clients’ securities and transfers for execution;
2) EUR 730,000 if the company provides the following services (Market Maker license):
- transactions with securities at own expense;
- covering securities or guaranteeing offers, issue or sale of securities;
In each case, one must prove the source of funds.
GENERAL STAFF ORGANIZATIONAL REQUIREMENTS:
Founders of a forex broker company, who own 10% or more of its shares, must meet high qualifications and have the required knowledge in the field of investment services and have experience in managing a broker company.
1) employees of the company must have sufficient skills, experience, and competence to perform professional or official duties;
FOLLOWING THE LOCAL LAW, THE RESPECTIVE INDIVIDUAL:
- a manager of an investment company and its investment agent;
- an investment agent manager of an investment company;
- an employee of the company and its investment agent who is involved in the provision of investment or ancillary services or the performance of investment transactions;
- an individual who participates in the provision of investment services by an investment company and whose services are at the disposal and control of an investment company or its investment agent;
- an individual who provides related services to an investment company or its investment agent under a transfer agreement.
FOREX COMPANY MANAGERS
Only individuals who have the relevant education, experience, and professional qualifications necessary to manage an investment firm with an impeccable reputation can be elected or appointed as the heads of investment companies.
The management of a forex company must consist of at least two members.
Members of the board of an investment company must have a university diploma or an equivalent certificate on education, as well as the experience necessary to manage an investment firm.
REQUIREMENTS FOR A FOREX BROKER COMPANY
A company that has received a forex license in the Czech Republic must have an operating office in the Czech Republic.
A company that obtains a forex license should not have any subsidiaries, except for those that carry out the same investment activities.
VALIDITY OF THE LICENSE
Having got a forex broker license in the Czech Republic, the company can further operate as a forex broker in other EU countries after going through a simple certification procedure.
PERIOD FOR OBTAINING A LICENSE
From 6 to 9 months (including the time for preparing documents)
THE PRICE INCLUDES:
- Registration of a company in the Czech Republic (provision of nominee services if necessary);
- Drawing up and applying for a license to the Czech National Bank;
- Preparing an appropriate company structure;
- Preparing a business plan for the company;
- Preparing the necessary manuals;
- Preparing the necessary company policies to be posted on the company’s website;
- Search for relevant specialists in the Czech Republic who meet the criteria for obtaining a license;
- Preparing responses to additional inquiries from the Czech National Bank;
- Preparing letters accompanying the application, in cases when the Czech National Bank asks additional questions;
- Accompanying a client in providing all the necessary documents and information;
- Opening a bank account for a company for forex activities;
- Connecting a merchant account to the company’s website.
The specialists of Eternity Law International will provide you with expert advice on obtaining a license in a suitable jurisdiction.
If you still have any questions regarding obtaining a license in the Czech Republic or any other jurisdiction you are interested in, please contact our specialists for detailed advice.